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EL

EQUITY LIFESTYLE PROPERTIES INC (ELS)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 was operationally solid in core MH (manufactured housing) and expense control, but softer in RV/marina variable demand; Normalized FFO was $0.69, exactly at the midpoint of guidance, with core NOI growth of 6.4% year over year and expenses 190 bps below guidance .
  • Headline GAAP EPS ($0.42) and revenue ($376.9M) were both a slight miss vs S&P Global consensus ($0.41 EPS*, $377.6M*), driven by higher-than-expected annual RV attrition at ~20 northern properties and weather-impacted transient RV in the quarter .
  • Full-year 2025 Normalized FFO/share guidance was maintained at $3.01–$3.11 (midpoint +4.9% YoY), while management lowered RV/marina growth assumptions and reduced OpEx, G&A and “Other income/expense” ranges; Q3 2025 Normalized FFO/share guided to $0.72–$0.78 .
  • Balance sheet de-risked: ELS added a $240M unsecured term loan (swapped to ~4.74% fixed), repaid all 2025 secured maturities, ended Q2 with ~8-year weighted average debt maturity, 4.5x Debt/Adjusted EBITDAre and 5.6x interest coverage .

Note: “Consensus” values marked with an asterisk (*) are from S&P Global; see footnote in Estimates Context.

What Went Well and What Went Wrong

What Went Well

  • Expense discipline: Core operating expenses were flat YoY in Q2 and 190 bps below guidance; utility recovery improved to ~48% YTD (up ~180 bps) and management reiterated cost flex at RV properties with variable occupancy .
  • MH fundamentals: Core MH base rental income rose 5.5% YoY; portfolio occupancy remains >94% with 97% of MH residents as homeowners, underpinning low turnover and cash flow stability .
  • Guidance resiliency and balance sheet: Normalized FFO/share of $0.69 hit guidance midpoint, and full-year guidance was maintained despite RV headwinds; no secured maturities before 2028; >$1B in available capital via LOC and ATM .
  • Quote: “Second quarter normalized FFO was $0.69 per share, in line with the midpoint of our guidance range… core portfolio performance generated 6.4% NOI growth… 70 basis points higher than guidance.” — CFO .

What Went Wrong

  • Annual RV attrition and transient softness: Core RV/marina annual revenue grew ~3.7% YoY, but missed internal plan by 90 bps ($0.7M) due to higher-than-expected annual attrition concentrated in ~20 northern properties; transient and seasonal declined 8.2% and 6.5% YoY, respectively .
  • Lowered RV/marina growth outlook: FY25 core RV/marina base rental income growth cut to 0.6%–1.6% (from 2.2%–3.2% previously); property operating revenue growth trimmed to 2.8%–3.8% (from 3.2%–4.2%) .
  • Home sales mix/volume: New home sales fell to 117 in Q2 vs 255 last year; management cited moderation at higher price points and quarterly mix dynamics impacting average sales price and used sales .

Financial Results

Headline Results (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Total Revenues ($MM)$372.3 $387.3 $376.9
Net Income per Common Share (GAAP)$0.50 $0.57 $0.42
FFO per Share (Fully Diluted)$0.76 $0.83 $0.69
Normalized FFO per Share (Fully Diluted)$0.76 $0.83 $0.69
Adjusted EBITDAre ($MM)$182.8 $197.6 $170.0

Q2 vs S&P Global Consensus

MetricQ2 2025 ActualQ2 2025 Consensus*
Revenue ($MM)$376.9 $377.6*
GAAP EPS$0.42 $0.41*

Values marked with * were retrieved from S&P Global.

Segment and Core Operating Detail (YoY)

Core Metric ($MM)Q2 2024Q2 2025
MH base rental income$176.5 $186.2
RV & marina base rental income$100.8 $101.6
Annual membership subscriptions$16.3 $16.7
Membership upgrade revenue$4.0 $3.1
Utility & other income$31.5 $32.9
Property operating revenues$332.5 $344.0
Property operating expenses (ex PM)$150.6 $150.5
Income from property ops (ex PM)$181.9 $193.5

KPIs and Mix (YoY)

KPIQ2 2024Q2 2025
MH occupied sites (end of period)68,933 68,683
MH occupancy %94.9% 94.3%
Monthly base rent per site$854 $904
RV/marina base rent – Annual ($MM)$74.6 $77.3
RV/marina base rent – Seasonal ($MM)$7.7 $7.2
RV/marina base rent – Transient ($MM)$18.5 $17.1
Utility recovery rate46.3% 48.8%

Guidance Changes

MetricPeriodPrevious Guidance (Apr 21)Current Guidance (Jul 21)Change
Normalized FFO/shareFY 2025$3.01–$3.11 $3.01–$3.11 Maintained
Normalized FFO/shareQ3 2025N/A$0.72–$0.78 New
Core MH base rental income growthFY 20254.8%–5.8% 4.9%–5.9% Slightly raised midpoint
Core RV & marina base rental income growthFY 20252.2%–3.2% 0.6%–1.6% Lowered
Core property operating revenues growthFY 20253.2%–4.2% 2.8%–3.8% Lowered
Core property operating expenses growth (ex PM)FY 20251.5%–2.5% 0.7%–1.7% Lowered
Core income from property ops growth (ex PM)FY 20254.5%–5.5% 4.5%–5.5% Maintained
Property mgmt & G&AFY 2025$119.0–$125.0M $115.8–$121.8M Lowered
Other income and expensesFY 2025$29.0–$35.0M $26.5–$32.5M Lowered
Weighted avg debt outstandingFY 2025$3.17–$3.37B $3.17–$3.37B Maintained
Interest & related amortizationFY 2025$129.1–$135.1M $129.0–$135.0M Slightly lowered
Dividend per shareQ3 2025—$0.515 declared (payable Oct 10) Declared

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24 and Q1’25)Current Period (Q2’25)Trend
RV Annual attritionQ1’25: Annual RV +4.1% YoY; seasonal/transient headwinds noted .Higher-than-expected annual attrition at ~20 northern properties; annual +3.7% YoY but ~$0.7M below plan; guidance reduced for RV/marina .Softening annual demand in select markets; expected to normalize over time .
Seasonal/Transient RVQ1’25: Seasonal −5.3%, transient −9.1% YoY .Q2’25: Seasonal −6.5%, transient −8.2% YoY; weather impacted transient .Slight further weakening; lower FY outlook .
Expense controlQ1’25: Core OpEx +1.5% YoY .Q2’25: Core OpEx flat; 190 bps below guidance; full-year OpEx growth cut to 0.7%–1.7% .Improving expense trajectory.
Membership program2025 launch of dues-based upgrades (2–4 year subs) .Membership count stabilized; paid originations ~5.6k; second quarter of sequential promo originations increase .Stabilizing memberships.
Development/expansion736 expansion sites added in 2024 .Delivered 1,500 MH and 2,900 RV sites over five years; steady pipeline .Continuing.
Balance sheet2024 LOC extension, active ATM .$240M term loan; swaps to ~4.74% fixed; no secured maturities before 2028; 4.5x Debt/Adj EBITDAre; 5.6x interest cover .Strengthened/liquidity preserved.
Macro/tariffs/wages—Monitoring tariff/CPI pass-throughs to utilities/wages; focus on utilities, payroll, R&M lines (2/3 of OpEx) .Cost vigilance continues.

Management Commentary

  • Strategic positioning: “Our MH portfolio represents approximately 60% of total revenue, with portfolio-wide occupancy over 94%... 97% of our residents in our MH portfolio are homeowners,” supporting reduced turnover and stable cash flows .
  • RV demand split: “Annual RV revenue grew 3.9% year-to-date,” with ~70% of annual revenue in Sunbelt locations (retired/semi-retired) and ~30% summer-focused families .
  • Operations and guidance: “Second quarter normalized FFO was $0.69 per share, in line with the midpoint… core [NOI] growth of 6.4%… 70 bps higher than guidance… we are maintaining our full-year 2025 normalized FFO guidance of $3.01–$3.11 per share” .
  • Balance sheet: “As of the end of June, we have no secured debt scheduled to mature before 2028… weighted average maturity almost eight years… Debt to EBITDAre 4.5x, interest coverage 5.6x” .

Q&A Highlights

  • Annual RV miss drivers and outlook: Annual RV/marina +3.7% YoY but ~$0.7M below plan, driven by occupancy; ~20 northern properties saw higher attrition; guidance cut by ~$1.2M for balance of year. Expect backfill in next summer season; rate growth ~6% continues .
  • Occupancy measurement clarity: Reported occupancy percentages include expansion sites in the denominator; actual quarterly change was a net loss of ~40 sites—“essentially flat.” Delinquency remains at 30–40 bps; >95% of MH buyers pay cash .
  • Canadian travel/visa fee: Some pullback in Canadian transients in the NE and PNW (small dollars); potential visa fee impact expected to be modest given many customers do not require visas for short stays .
  • Expense flex: Savings stem from utilities, payroll, R&M; two-thirds of core OpEx expected up ~2.4%; remaining one-third (taxes, insurance, membership S&M) down ~1% YoY including insurance renewal benefits and membership cost savings .
  • Membership/dues-based upgrades: New product increases annual dues by ~$1,500–$3,500 with added benefits (longer stays, earlier bookings, rental discounts), supporting stabilization in member count and originations .

Estimates Context

  • Q2 2025 results vs S&P Global consensus: Revenue $376.9M vs $377.6M*, GAAP EPS $0.42 vs $0.41* — both slight misses on a narrow basis; Normalized FFO/share hit the midpoint of company guidance .
  • Forward consensus context: Management guided Q3 2025 Normalized FFO/share to $0.72–$0.78 and maintained FY 2025 Normalized FFO/share at $3.01–$3.11; sell-side models may refine RV/marina revenue and OpEx/G&A run-rates given the updated ranges .

Values marked with * were retrieved from S&P Global.

Key Takeaways for Investors

  • Mix matters: MH (60%+ of revenue) continues to comp ~5.5% with >94% occupancy and 97% homeowner base, anchoring cash flows; RV seasonal/transient remains the pressure point near-term .
  • Results were “quality in the middle”: Normalized FFO met midpoint; core NOI outperformed guidance; GAAP EPS and revenue narrowly missed consensus on RV occupancy headwinds .
  • Guidance durability: FY Normalized FFO maintained despite lowering RV/marina growth; expense actions (utilities, payroll, insurance) and lower G&A underpin the bridge .
  • Balance sheet optionality: No secured maturities before 2028; 4.5x leverage and >$1B dry powder provide capacity for opportunistic capital allocation as transaction markets thaw .
  • Near-term setup: Watch Q3 seasonal/transient trajectory vs revised guidance and early signs of annual RV attrition normalization at the ~20 impacted properties; rate capture remains healthy .
  • Membership stabilization is a modest tailwind as paid and promotional originations improve and dues-based upgrades gain traction .
  • Dividend continuity: Q3 2025 dividend declared at $0.515/share (annualized $2.06) underscores cash flow stability .

Appendix: Additional Relevant Disclosures

  • Q2 press release and 8-K furnished detailed guidance, the $240M term loan and swap package (to ~4.74% fixed), and non-GAAP reconciliations .
  • Third-party recognition: 55 RV resorts/campgrounds received 2025 TripAdvisor Travelers’ Choice Awards, supporting brand equity and referral-driven demand .